A P46 form was an essential document that employees in the United Kingdom used to notify their employer of their tax status.
In the past, when starting a permanent job with a new company, or registering with a placement agency, you might have been asked to complete a P46 tax form. The purpose of this form was to enable your new employer to submit your income tax details to the HMRC, for you to be allocated your correct tax codes.
The P46 was used for three purposes:
- If you had not received a P45 from your previous employer.
- If you were starting your very first job.
- Or if you were starting a second job without leaving your current job.
The P46 form is now called a Starter Checklist.
The P46 was replaced by the new starter checklist in April 2013, which involves a series of relevant questions which your employer submits to their payroll, to allocate your correct tax code needed to calculate the amount of tax and gross salary that is due on your payday.
While the New Starter Checklist has been available since April 2013, many employers across the UK continue to use the P46 as it still serves the purpose for which it was initially designed. However, due to new introductions, such as student loan plans, the P46 no longer covers enough information that is required by the HMRC.
Therefore, the P46 is no longer technically valid, and all efforts should be made by the employer to request a Starter Checklist from a potential employee.
The primary difference between other tax forms and the Starter Checklist form is that the starter checklist must be completed by you and submitted to your employer before starting your new job.
Still generally (but incorrectly) referred to as a P46 form, it's easy to access the Starter Checklist. For the most up-to-date source, go to the GOV.UK tax office website, where you can either download the Starter Checklist or complete it online.
Online Starter Checklist
This form is filled in on your computer screen. All the questions, except those marked ‘optional’ have to be completed correctly. Please note that the form cannot be saved, but when you’ve completed it you’ll be able to print a copy.
Starter Checklist (printable version)
This blank form can also be printed, filled in manually, and then presented to your employer.
What information do I need to provide?
There are some important pieces of information that you'll need to complete your Starter Checklist. Please ensure that you have all relevant information at hand and that everything you need is correct and up to date.
The basic personal information to list on a Starter Checklist form includes:
- Your name.
- Your National Insurance number.
- Date of birth.
- Your physical address.
- Employment start date.
- Any student loans you might have.
Additionally, you will need to indicate which statement applies to your employment status/history. You will have to choose one of the following options:
- A- This is your first job since last 6 April and you have not been receiving taxable Jobseeker's Allowance, Employment and Support Allowance, taxable Incapacity Benefit, state pension or occupational pension.
- B- This is now your only job, but since last 6 April you have had another job, or have received taxable jobseeker's allowance, employment and support allowance or taxable incapacity benefit. You do not receive state or occupational pension.
- C- You have another job or receive a state or occupational pension.
What happens if I don't provide a starter checklist?
If you have not completed nor handed in your Starter Checklist, then what often happens is that employers will utilise the Emergency Rate Tax Code for your profile.
Here are the following flat rate deductions you will pay in the UK, over and above your personal allowance:
- 20% on earnings up to £37,500
- 40% on earnings between £37,501 and £150,000
- 45% on earnings above £150,001
However, this will be problematic for both you and your employer eventually because you would then have been possibly issued an incorrect tax code.
Additionally, if you leave your job to start a new one, the information on your P45 form might incorrectly state how much tax you've paid on your salary in the previous tax year.
To correct this discrepancy can be an arduous task, with potential negative financial implications down the line. The HMRC does try to make the updating of your tax code a simple process, but it's definitely better to provide the correct information upfront and avoid unnecessary admin in the future.
What are the employer responsibilities when filling out a starter checklist?
When an employee starts a new job in the United Kingdom, their employer is responsible for completing and submitting a Starter Checklist to their financial department.
The employer is also responsible for ensuring that the employee's correct National Insurance number and date of birth are included on the form.
This will ensure that all the employee's personal and financial information has been correctly loaded on their payroll system.
The employer's financial department can then determine the correct employee's tax code to apply for when the employee joins the company.
A mention about the P45 form
You should receive a P45 from your employer when you stop working for them. By law, your employer must give you a P45 within the time frame of the current financial year.
Your P45 shows the tax amount you’ve paid on your salary so far in the tax year (6 April to 5 April).
A P45 has 4 parts (Part 1, Part 1A, Part 2 and Part 3).
- Your employer will send the details for Part 1 to the HMRC and give you the rest.
- You then give Part 2 and 3 to your new employer (or to Jobcentre Plus if you’re unemployed).
- You must keep Part 1A for your own records.
If you have a P45 form, you will not need to complete a starter checklist when starting a new job.
If you do not have a P45
Your new employer will have to work out how much tax you should be paying on your salary if you do not have a P45. If you do not have a P45 because:
- You’re starting your first job
- You're taking on a second job
- You cannot get your P45 from your previous employer
You must tell your new employer about things like other jobs you have, any benefits you receive, and if you have a student loan. This is where the starter checklist comes into play, and your employer will use this information to figure out your correct tax code before you get your first paycheck.
It is important to ensure that your tax details are up-to-date and that you have all relevant and correct information on record with your employer.
Failure to keep on top of your tax affairs could result in you not being eligible for a tax refund, or you might even be paying too much tax!
You want to pay the correct amount of tax, especially if you have started a new employment contract or are looking to receive a tax rebate.